The US healthcare system continues to morph in 2014. This year’s changes will affect hospitals and healthcare providers in several ways, including adjustments to budgets and impacts on patient care delivery. Cuts to Medicare, lack of Medicaid expansion in some states, and hospital debts are actively transforming the US hospital model. The evolving payment structure will reward hospitals and health systems for providing high-value care in lieu of reimbursement based on volume of services. In turn, health systems will seek to decrease costs through technological advancements, personalized medicine, and alternative treatment settings such as increased outpatient service offerings.
As we reported here on the Soriant Source last year, a few of the Medicare-focused cuts include:
Eliminating the critical access hospital designation for hospitals located fewer than 10 miles from the nearest hospital
Implementing site-neutral payments for some procedures commonly performed in skilled nursing facilities and inpatient rehabilitation facilities
Implementing bundled post-acute care payments
The Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS)* scores present an additional opportunity for health systems to improve. As part of health reform, Medicare payments and incentives are redesigned to promote high-quality care and care quality improvement. Improving HCAHPS scores will influence reimbursement levels in the future.
Broad delivery system reforms will improve quality care coordination and efficiency. In addition, hospitals will be expected to increase transparency in the reporting of outcome and safety data. Operational functions will need to be evaluated and modified to boost performance. Organizations must formulate a strong vision for the future that is accessible and adaptable.
New internal functions may need to be developed to structure more effective project management. Enlisting assistance from a third-party organization with proven success in evaluating and implementing improvement projects may prove to be invaluable. Hospitals may be able to differentiate themselves within a market by refining their mission.
Many providers recognize the validity of value-based care delivery, and one of the challenges for health systems includes managing the shift to these types of models while maintaining a financial benefit. The established fee-for-service reimbursement model does not directly support this new type of organization. Therefore, limiting basic operating costs by taking a systems approach that is rigorous and transparent with standardized systems will be key.
Price transparency offers a distinction between “sticker price” and the amount that is actually received in exchange for a service. Being in front of the healthcare changes will be critical, giving attention to hospital charges, prices, and cost of care—particularly imaging, diagnostics, pharmacy, and ambulatory surgery—can substantially impact budget costs and bottom-line results.
In this changing environment, hospitals must develop an effective response to the economic dynamics of various local markets—addressing the realities and limitations of local economies, including mitigating the strategies of large employers for reducing healthcare costs. Hospitals should begin to consider the implementation of various cost-effective measures, like systems such as UV disinfection technology to reduce rates of hospital-acquired infections.
Preparation and education are essential to effectively embracing the state of transition in the healthcare industry. Focusing on efficiency and necessity and creating an improved health system that highlights value-based care delivery is the wave of the future.
*A national standardized survey tool used to measure adult inpatient perception of quality of care.
To learn more about strategies for maximizing Medicare reimbursement and to better understand other recently implemented changes affecting hospitals, please visit the following.